Specific proteolytic processing in secretory compartments and at the cell surface is required for maturation or modification of numerous transmembrane and secreted proteins in eukaryotic cells. Studies of the yeast Kex2 protease, which cleaves the alpha-mating factor precursor and other proteins at paired basic residues sites in the trans Golgi network (TGN), led to the discovery of a novel family of subtilisin- related proprotein processing enzymes conserved in eukaryote from fungi to invertebrates and vertebrates. These enzymes process prohormones and neuropeptides in the regulated secretory pathway and a variety of proproteins in the constitutive secretory pathway. The first known human Kex2 homologue, furin, is implicated in many physiology/medically important processes: maturation of precursors of growth factors and growth factor receptor, coagulation factors, viral glycoproteins and bacterial toxins. Work in the previous funding period has given us a comprehensive, quantitative view of Kex2 specificity and insights and tools for analysis of furin. We have also developed powerful genetic tools for manipulating Kex2 specificity. Finally, we have undertaken the analysis of a novel class of yeast processing enzymes with the expectation that, as with Kex2, the homologs of these enzymes will be of general importance in eukaryote. Current aims as follows: 1) Previous studies have given us a quantitative understanding of Kex2 specificity and a set of tools, including purified furin, with which to analyze furin specificity in detail. Experiments proposed here will extend our understanding of specificity in this important family of enzymes to the mechanistic level, answering fundamental questions about how specificity is 'apportioned' in the catalytic cycle. 2) In the previous grant period, methods were developed for quantitative analysis of Kex2 specificity in vivo and for genetic selection of mutant forms of Kex2 protease that exhibit altered specificity. Exploitation of these methods, combined with biochemical analysis of the mutant enzymes, is intended to provide a comprehensive understanding of the structural basis of specificity in the enzyme. 3) Interest in general questions about proprotein processing led us to identify a cell surface 'secretase' activity in yeast. We have shown that this activity depends on members of an emerging family of GPI-anchored cell surface aspartyl proteases. Analysis of the specificity and physiological function of these enzymes will lead to a deeper understanding of the range of processing reactions that occur in eukaryotic cells.